FAQ

Frequently asked questions

Short-Term Bridge Loans:
Ideal for real estate investors looking to quickly close on a property, make renovations, or secure better long-term financing. These loans typically have terms of 6 to 12 months and offer interest-only payments.

Fix-and-Flip Loans:
Tailored for investors looking to purchase, renovate, and resell properties. These loans help cover the acquisition and renovation costs, with a flexible term until the property is sold.

Construction Loans:
Designed for ground-up construction projects, offering the financing needed to build new properties or major renovations.

Commercial Real Estate Loans:
Financing for commercial properties such as retail, office, industrial, or multifamily buildings. These loans help investors acquire, refinance, or improve income-generating properties.

Transactional Funding:
Short-term funding for real estate investors who need temporary capital to close deals quickly, typically used in double-closing transactions.

We work with investors on a wide range of projects and are committed to offering flexible terms that align with your investment strategy.

HB Capital’s loan underwriting process is designed to be fast, flexible, and efficient, so you can move forward with your real estate investment without delay. Here’s what the process typically looks like:

Loan Application: 
The process begins when you submit a loan application, providing key information about the property, your investment strategy, and your financial background.

Initial Review:
We perform an initial review to assess the property and the deal’s viability. This includes analyzing the property’s value, market conditions, your experience as an investor, and the proposed exit strategy.

Documentation Submission:
You’ll be asked to provide supporting documentation, such as property appraisals, purchase agreements, renovation plans (if applicable), your credit history, and any other relevant financial details.

Due Diligence:
We conduct due diligence on the property, which may involve property inspections, appraisals, and title reviews to ensure the investment is sound. We also verify the borrower’s ability to execute the project and repay the loan.

Underwriting Decision:
Once the due diligence is complete, our underwriting team assesses the risk and finalizes the loan terms, including the interest rate, loan amount, and repayment schedule.

Loan Approval:
If the loan is approved, we issue a commitment letter outlining the terms of the loan for your review and acceptance.

Closing and Funding:
After the terms are agreed upon, the loan proceeds to closing, where documents are signed, and funds are disbursed. This entire process typically takes 7 to 14 days but can be expedited for urgent deals.

Our underwriting process is designed to evaluate the overall strength of the deal and prioritize speed and efficiency to ensure you can close on your investment in a timely manner.

At HB Capital, we pride ourselves on a strong track record of successful loan performance, thanks to our rigorous underwriting process and experienced team. Our default rates have remained lower than industry averages due to our focus on working with experienced real estate investors and structuring deals with solid exit strategies.

Our approach emphasizes building strong relationships with borrowers and providing flexible terms that align with their investment goals. In cases where borrowers face challenges, we aim to work collaboratively to find solutions that help them complete their projects and repay the loan successfully.

This performance-driven approach has led to a high level of borrower satisfaction and repeat business, demonstrating our commitment to both investors’ success and the overall health of our loan portfolio.

At HB Capital, our primary revenue streams come from the interest and fees associated with our real estate lending services. These include:

Interest Income:
The majority of our revenue comes from the interest payments made by borrowers on the short-term bridge loans, fix-and-flip loans, construction loans, and other financing options we provide.

Origination Fees:
We charge loan origination fees, typically ranging from 1% to 3% of the loan amount, which cover the cost of processing and underwriting the loan.

Late Fees and Extension Fees:
While we work closely with borrowers to avoid them, late fees or extension fees can also contribute to our revenue in cases where loan terms are extended or payments are delayed.

Transactional Fees:
For services like transactional funding, we earn fees based on the capital provided for short-term transactions, which are repaid very quickly.

Regarding profit margins, they can vary based on the type of loan, market conditions, and the borrower’s risk profile. However, bridge loans and other short-term loans often offer attractive profit margins due to their higher interest rates and fees compared to conventional loans. Our goal is to maintain a balanced portfolio with competitive returns while managing risk effectively through diligent underwriting and relationship management.

HB Capital’s growth strategy and market positioning are centered around becoming a leading lender for real estate investors who need fast, flexible, and reliable funding. Our strategy includes:

Expanding Our Lending Portfolio:
We aim to increase our market share by offering a wider variety of loan products to meet the diverse needs of real estate investors, including bridge loans, fix-and-flip loans, construction loans, and commercial real estate loans.

Geographic Expansion:
We are focused on expanding our reach by entering new markets across the U.S., with a particular focus on high-growth areas that are attracting real estate investors and developers. This includes scaling operations in key markets such as Arizona, where HB Capital is based, and beyond.

Building Strong Relationships:
 Our market positioning emphasizes personalized service, fast approvals, and flexible financing solutions. We cultivate long-term relationships with real estate investors, brokers, and agents, creating repeat business and increasing word-of-mouth referrals.

Leveraging Technology:
We are investing in technology to streamline the loan application, underwriting, and servicing processes. By offering an easy and efficient user experience, we aim to make it faster and simpler for real estate investors to secure funding for their projects.

Creating Strategic Partnerships:
We plan to build partnerships with real estate brokerages, investment groups, and other industry stakeholders to increase our presence in the market. These relationships help us tap into a steady flow of deals and establish HB Capital as a go-to lender for real estate investors.

Brand Development:
We position ourselves as a trusted, agile lender who understands the unique needs of real estate investors. Through strategic marketing, education, and events, we aim to strengthen our brand as a reliable partner in the real estate investment community.

Our ultimate goal is to be recognized as a leading private lender in the real estate investment space, known for delivering customized lending solutions, building lasting relationships, and helping investors succeed in a competitive market.

To be eligible for a loan from HB Capital, borrowers typically need to meet the following criteria:

Real Estate Investment Experience:
While not always required, having a track record of successful real estate investments, such as fix-and-flip projects or rental properties, is a strong plus. First-time investors may also be considered depending on the strength of the deal.

Property Type:
The loan must be for investment purposes, not personal use. Eligible properties include residential investment properties, commercial real estate, multifamily buildings, and fix-and-flip projects.

Creditworthiness:
Although we are more flexible than traditional lenders, we do evaluate the borrower’s credit history to assess risk. Good credit is advantageous but not mandatory. We also consider the borrower’s ability to execute the project successfully.

Down Payment or Equity:
 Borrowers must have a sufficient down payment or equity in the property, typically ranging from 20% to 30% of the property’s value. This shows commitment and reduces risk for both the borrower and the lender.

Exit Strategy:
A well-defined exit strategy is essential, such as refinancing with a long-term loan, selling the property, or using rental income to repay the loan. The exit strategy should demonstrate how the borrower plans to repay the loan within the agreed timeframe.

Documentation:
Borrowers must provide necessary documentation, including property details, purchase agreements, appraisals, financial statements, and personal identification, to support their loan application.
Meeting these criteria helps expedite the approval process and ensures that the loan aligns with both the borrower’s investment goals and HB Capital’s lending guidelines.

The terms and conditions of loans from HB Capital are designed to provide flexibility to real estate investors while ensuring responsible lending practices. Here are the key terms and conditions you can expect:

Loan Amount:
Loan amounts typically range from $100,000 to several million dollars, depending on the property type, location, and borrower qualifications

Loan Term:

The standard loan term is short, ranging from 6 to 12 months. In certain cases, extensions may be available if the borrower needs additional time to complete their project or secure permanent financing. 

Interest Rate:
Interest rates generally range from 8% to 12%, depending on the specific loan, the borrower’s experience, and the property’s value.

Repayment Structure:
Most loans are structured with interest-only payments during the loan term, with the principal (full loan amount) due in a lump sum at the end of the term. This allows borrowers to keep monthly payments low while focusing on completing their investment project.

Fees:
Origination fees typically range from 1% to 3% of the total loan amount. Additional fees may include closing costs, appraisal fees, and legal fees, depending on the specifics of the loan

Prepayment:
Borrowers may repay the loan early without incurring any prepayment penalties, offering flexibility for those who are able to sell the property or refinance ahead of schedule

Collateral:
Loans are secured by the property being financed, which serves as collateral. In some cases, personal guarantees or additional collateral may be required, particularly for higher-risk projects.

Down Payment/Equity Requirement:
Borrowers are typically required to contribute 20% to 30% of the property’s purchase price or have equivalent equity in the property if refinancing

Exit Strategy:
Borrowers must present a clear and viable exit strategy for repaying the loan. This could include selling the property, refinancing with a traditional lender, or using rental income to pay off the loan.

Use of Funds:
Funds must be used for real estate investment purposes, such as property acquisition, renovations, or new construction, and cannot be used for personal or non-investment-related expenses.

Loan Extensions:
Extensions may be available if needed, but are subject to approval and could involve additional fees or adjustments to the interest rate. The extension terms are negotiated on a case-by-case basis.

Documentation Requirements:
Borrowers are required to provide comprehensive documentation, including but not limited to property appraisals, purchase agreements, financial statements, and personal identification, to support their loan application and ensure loan compliance.
By clearly defining the terms and conditions upfront, HB Capital ensures a smooth process for borrowers and helps set realistic expectations for the loan’s repayment and project timelines.

 

The loan approval process at HB Capital is designed to be fast and efficient, recognizing the time-sensitive nature of real estate investments. Typically, the loan approval process takes between 7 to 14 days, though this can vary based on several factors:

  • Complexity of the Deal:
    More straightforward deals with clear documentation and lower risk tend to be approved more quickly. Complex deals may require additional due diligence and could take longer.

  • Submission of Documentation:
    The speed of approval is largely dependent on how quickly the borrower can submit the required documentation, such as property appraisals, purchase agreements, financial statements, and personal identification.

  • Due Diligence and Underwriting:
    Once documentation is submitted, we conduct property appraisals, title checks, and review financials to ensure the deal’s viability. This process typically takes a few business days.

For time-sensitive deals, we do our best to expedite the process to help you close on your investment as quickly as possible.

To apply for a loan with HB Capital, you will need to provide the following documentation to support your application:

Loan Application:

A completed loan application form that includes details about the property, loan amount, and your intended use of the funds.

Property Information:

Purchase Agreement:
If applicable, provide a signed purchase agreement for the property.

Appraisal or Market Value Estimate:
An independent appraisal or documentation supporting the property’s value.

Title Information:
Title report or preliminary title commitment to verify clear ownership and any existing liens.

Borrower Financial Information:

 Personal Identification:

A government-issued ID such as a driver’s license or passport.

Credit Report:
A recent credit report to assess your creditworthiness.

Proof of Income:
Bank statements, pay stubs, or other documentation to verify your ability to meet any financial obligations during the loan term.

Tax Returns:
Recent tax returns may be required, especially for larger loans.

Business Information (if applicable):

Entity Formation Documents:
If you are applying through an LLC, corporation, or other business entity, provide the formation documents and operating agreement.

Borrower Experience:
A summary of your real estate investment experience, including past projects or a portfolio of your previous investments.

Exit Strategy:

Plan for Repayment:
Documentation supporting your exit strategy, such as a sales contract for the property or a plan for refinancing the loan with a traditional lender.

Renovation or Construction Plans (if applicable):

Scope of Work:
A detailed plan for any renovations or construction, including cost estimates and timelines.

Contractor Bids:
If you plan to hire contractors for the work, provide bids or contracts for the project.

Insurance:

Proof of insurance for the property, such as hazard insurance, builder’s risk insurance, or other appropriate coverage depending on the property and project.

Providing complete and accurate documentation upfront helps speed up the approval process and ensures that we have everything needed to evaluate your loan application effectively.

At HB Capital, we understand that sometimes unexpected challenges can arise, and we strive to work with borrowers who encounter difficulties in making payments. Here’s what happens if you experience trouble making payments:

Open Communication:
The first and most important step is to communicate with us as soon as possible if you’re having trouble making payments. We encourage borrowers to reach out early to discuss their situation and explore options before falling behind.

Payment Plan or Extension Options:
Depending on the circumstances, we may offer options to modify your loan, such as creating a revised payment plan or extending the loan term to provide more time for you to stabilize your situation. Extensions may involve additional fees or adjustments to the interest rate but can help prevent default.

Late Fees:
If payments are missed, late fees may be applied according to the terms outlined in your loan agreement. We will work with you to catch up on payments to avoid further penalties.

Loan Modification:
In some cases, we may consider restructuring the loan to better suit your financial situation. This could involve adjusting payment terms, interest rates, or other aspects of the loan to help you meet your obligations.

Forbearance:
In certain situations, we may offer a temporary forbearance, during which payments can be paused or reduced for a specific period. Forbearance is typically used when borrowers are facing short-term financial difficulties but expect to resume regular payments soon.

Exit Strategy Reassessment:
If your exit strategy (e.g., selling the property or refinancing) has changed, we can reassess your options and potentially adjust the terms of the loan to reflect new plans for repaying the loan.

Foreclosure as a Last Resort:
If all other options are exhausted and the loan remains in default, foreclosure may be initiated as a last resort. In this case, the property used as collateral for the loan would be sold to recover the outstanding balance. We work hard to avoid this outcome by exploring all other options first.

Our goal is to help you succeed in your investment, and we are committed to working collaboratively with you to find solutions if financial difficulties arise. The sooner you communicate with us, the more options we can explore to help you stay on track.

 

This question seeks to understand the tools and processes HB Capital employs to evaluate and mitigate risks associated with lending, such as credit scoring, risk profiling, and comprehensive due diligence.

Investors and stakeholders want to know what steps are taken when loans face potential default, including the collection process, legal measures, and recovery efforts.

This question focuses on the criteria and procedures the company follows when reviewing loan applications, including how borrower risk, collateral, and overall creditworthiness are evaluated.

This question addresses how the company mitigates risks related to market fluctuations, operational inefficiencies, and external factors that could affect the business.

Stakeholders want to know how HB Capital prepares for unexpected events like economic downturns, regulatory shifts, or natural disasters, and what strategies are in place to mitigate these risks.

Borrowers typically want clarity on the types of fees they might encounter, such as origination, processing, underwriting, and any other charges.

This question seeks to explain how HB Capital calculates its fees and what variables—like loan amount, term length, or borrower profile—affect the costs.

Borrowers often want to ensure there are no hidden charges, such as prepayment penalties, late fees, or administrative costs that might not be mentioned upfront.

This question explores whether HB Capital offers any flexibility in fees and whether borrowers have room to negotiate or request waivers for certain charges.

Borrowers need to understand how and when fees will be communicated, whether they will appear in the loan agreement, and the timeline for payment.

 Borrowers and investors want to understand the security measures, such as encryption and two-factor authentication, that HB Capital uses to safeguard personal and financial data.

This question seeks to explain the tools and features HB Capital offers for online account management, including viewing account details, making payments, and tracking loan status.

 It’s important for users to know what actions to take if they believe their account has been compromised, such as reporting the issue or contacting customer support.

Borrowers need to know how to change or update personal details, such as contact information, banking details, or passwords, and what procedures to follow.

This question focuses on how borrowers can recover access to their accounts if they are locked out, and what support options and identity verification processes are available.

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